New Delhi, August 6: Indian companies have reported results for the first quarter of the fiscal year 2026-27 (April-June) that surpass expectations. Despite losses in oil marketing companies (OMCs), strong performances in the banking and financial services (BFSI), metal, technology (IT), and automobile sectors have supported corporate profits. This information comes from a report by brokerage firm Motilal Oswal Financial Services (MOFSL).
According to the report, when excluding oil marketing companies, there was a 17% year-on-year increase in corporate income. This indicates that despite the pressure from high crude oil prices, the fundamental position of the Indian corporate sector remains robust.
The report analyzed companies that account for approximately 70% of the total estimated profits in key sectors. Based on this analysis, total income grew by 2% in the first quarter, while the market had anticipated a decline of about 10%. Thus, the results were significantly better than expected.
In terms of sector performance, BFSI made the most substantial contribution, with a 20% year-on-year increase in income. The metal sector saw an impressive growth of 53%. Income in the technology sector rose by 11%, while the automobile sector experienced a 7% increase.
So far, 39 Nifty companies that have declared their results reported an average profit growth of 11%, while the market had only expected a 7% increase. According to the report, nearly 49% of companies outperformed the brokerage firm’s profit estimates, while only 22% reported weaker results, reflecting the overall strength of the earnings season.
However, not all sectors performed positively. Oil marketing companies, cement, aviation, and healthcare were the sectors that exerted the most pressure on income this quarter, primarily due to high crude oil prices and demand-related challenges in some areas.
Large-cap companies also performed well, with a 6% increase in income. In contrast, mid-cap companies saw a 31% decline in income, largely due to losses in oil marketing companies.
Nevertheless, if OMCs are excluded, mid-cap companies actually experienced a 25% increase in income. This indicates that most mid-cap companies performed strongly, with the decline primarily confined to the oil sector.
Small-cap companies emerged as the biggest winners this quarter, with a 32% increase in income. The better performance of the financial sector and the comparative base effect from last year supported this growth.
The report noted that the pace of income estimate reductions in the first quarter has slowed, which is a positive sign for the market. However, geopolitical tensions, fluctuations in energy prices, and increasing activities related to IPOs and capital raising may keep the stock market volatile in the coming months.
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